Major European Issues

May 21, 2024

The topical issue of this newsletter is, of course, the forthcoming European elections on June 9, which are the subject of the editorial, and of course the latest PAY TECH DAY, organized by MANSIT, with the support of FRANCE PAYMENTS FORUM on April 25, and progress on various European regulations, including the one on Digital Identity (Hervé Sitruk & Nicolas de Seze).

The topical issue of this Newsletter is, of course, the forthcoming European elections on June 9. They follow on from Europe Day on May 9, the anniversary of Robert Schuman's declaration on May 9, 1959, 74 years ago, which is considered the founding act of today's European Union.

See Europe Day - Hervé SITRUK (LinkedIn)

This topic is the subject of the editorial in this Newsletter, and of course of the latest PAY TECH DAY, organized by MANSIT, with the support of FRANCE PAYMENTS FORUM on April 25, on the theme of " Payment solutions and players in France and Europe ". Videos of the keynotes and round tables are available on the France Payments Forum website:

Another conference was held the day before, organized by the ECB, on the theme of " An innovative and integrated European retail payments market ".

An innovative and integrated European retail payments market (europa.eu)

Instant transfer

On April 30, the European Commission organized a Q&A workshop to help understand the regulation on instant transfers, which, following adoption by Parliament and the Council, came into force on April 8, 2024 (see our previous Newsletter).

To find out more about this workshop, read Ludovic Vathelot's article

(2) Problems implementing the regulation on instant transfers | LinkedIn

Payment Services Directive and Regulation (PSD3/RSP)

At its plenary session on April 23, the European Parliament adopted its "negotiating mandates" for PSD3 and PSR, which include the introduction of a new definition of authorization, and stronger guarantees for users in terms of managing access to payment data.

But the PSD is unlikely to be adopted before the^2nd half of 2024, or even before the spring of 2025, as is the regulation on the digital euro.

On April 29, the European Banking Authority (EBA) published an " EBA Opinion on new types of payment fraud and possible mitigants".. This Opinion is based on the observation that strong authentication has significantly reduced fraud, but that new fraud techniques based on social engineering are emerging. To counter these new types of fraud, the EBA proposes to add new security measures to those already provided for in the Commission's proposals for PSD3 and PSR.

Press review

Digital identity

As Stéphane MOUY reported at PAY TECH DAY, the regulation of April 11, 2024 on the establishment of a European framework for a digital identity was published in the Official Journal of the EU on April 30.

On this subject, please refer to the Position Paper of the Electronic Signature and Digital Identity WG of FRANCE PAYMENTS FORUM.

And to Stéphane MOUY's article: eIDAS 2 digital identity portfolios and payments: big bang or pschitt effect? - France payments forum

As Hugo Mania (ANSSI) reminds us in a LinkedIn Post, this publication of the eIDAS2 Regulation is the starting point for the timetable for the next stages of this regulation.

And as Julien Maldonato (Deloitte) also points out in a LinkedIn Post, on May 8 the European Commission launched a call for projects to deploy a digital identity portfolio.

EPI (Wero)

During Round Table 2 of our PAY TECH DAY on April 25, Martina Weimert, Managing Director of EPI, announced the launch of Wero on a first use case (P2P) from the end of June until October, with a first wave made up of German, Belgian and French banks, followed by a second wave with Dutch banks. (Cf. above, the video of the^2nd PAY TECH DAY 2024 round table). The second use case will be e-commerce, for which EPI plans an initial test at the end of the year in Germany, followed by a full-scale launch in summer 2025.

Joachim Schmalzl, President of EPI, expressed himself in the same terms at round table 2 of the ECB conference on April 24.

Press review

Euro central digital retail

The past few weeks have been marked by :

Several contributions from Piero Cipollone (ECB) on the digital euro:

April 11 to the Eurogroup finance ministers,
April 17 at the Italian Banking Association,
On April 24, at the above-mentioned ECB conference (" An innovative and integrated European retail payments market "), where, in addition to the opening keynote, he moderated a round table on " Strengthening the European retail payments landscape: Public and private sectors join forces ",
On May 10, before the Governors of the Central Banks of Latin America (CEMLA).

A speech by Joachim Nagel, President of the Bundesbank, on April 16 to students at an American university, who concluded by pointing out that " many people still have only a very vague understanding of the goals and framework of the digital euro project .Therefore, we have a lot of work ahead of us convincing the public and gaining its trust. I am firmly convinced that the digital euro will be a success ".

The ERPB (Euro Retail Payments Board) meeting on April 11 was entirely devoted to the digital euro, and more specifically to the following points:

A letter from Piero Cipollone to the European Commission in response to the consultation it launched in January 2024 on Apple's proposals for opening up its NFC antenna. The letter points out that "The current proposed commitments fall short of ensuring a truly equal level playing field for a third-party payment solution in terms of end-user experience for in-store payments with iOS smart phones. If the proposed commitments would also be applicable to a potential digital euro, they would not, per se, guarantee that digital euro payments made using iPhones were seamless and user-friendly".

Euro digital central wholesale

The seventh meeting of the Eurosystem Contact Group (NTW-CG) was held on April 10. The main aim of the meeting was to (a) finalize preparations for the experiments to be conducted by the Eurosystem with market players over the coming months.

Press review

One month later, in a press release dated May 14, the ECB announced that an initial experiment had been successfully carried out. Conducted by the Austrian National Bank, the experiment concerned " the tokenisation and DvP settlement of government bonds in a secondary market transaction against central bank money ".

This same work by the Eurosystem has also been the subject of two recent presentations:

One by Denis Beau, Senior Deputy Governor of the Banque de France, on April 25 in Montpellier (" MNBC and articulation with the world of crypto-assets "), the first part of which was entitled "Accompanying the tokenization of finance" (see also the slides of Denis Beau's presentation) .
The other by Piero Cipollone (ECB) on May 9 (Tokenisation of financial instruments and central bank money settlement) .

DORA

On April 11, the European Banking Authority issued a press release announcing the launch in May of a " dry run exercise " to prepare the financial industry for the next stage in DORA implementation.

Press review